1. OSI Systems is like Philips Healthcare, but they also manufacture the X-ray and detection systems used for security screening at airports and borders.

2. OSI Systems is like a specialized Siemens, providing critical infrastructure technology for airport security and sophisticated patient monitoring systems for hospitals.

• Security Inspection Systems: These systems utilize X-ray and gamma-ray technology for the screening of cargo, vehicles, baggage, and people at various checkpoints globally.
• Trace Detection Systems: These products are designed to detect minute quantities of explosives, narcotics, and other contraband from surfaces or air samples.
• Patient Monitoring Devices: Medical equipment used in healthcare settings to continuously track and display vital physiological signs like heart rate, blood pressure, and oxygen levels.
• Anesthesia Delivery & Ventilator Systems: Advanced medical devices providing precise anesthesia gas delivery and respiratory support for patients during surgery and critical care.
• Optoelectronic Components: Custom and standard high-performance photodiodes, optical receivers, and other specialized optoelectronic devices used in diverse industries.
• Electronics Manufacturing Services (EMS): Contract manufacturing services for electronic circuit board assemblies and complete electronic systems for original equipment manufacturers across various sectors.

OSI Systems (symbol: OSIS) sells primarily to other companies and governmental entities rather than directly to individuals. While specific major customer company names are generally not disclosed due to the nature of their business (government contracts, B2B sales to numerous institutions), their customer base can be categorized as follows:

• Government Entities: This includes national, state, and local governments, their agencies, and departments globally. These customers utilize OSI Systems' security and inspection products for customs, border control, transportation security (e.g., airports, seaports), and critical infrastructure protection.
• Healthcare Providers: Hospitals, multi-hospital systems, clinics, emergency medical services (EMS), and other healthcare facilities are major customers for OSI Systems' healthcare division, which provides patient monitoring and diagnostic systems.
• Original Equipment Manufacturers (OEMs): A broad range of other companies across various industries purchase optoelectronic components and custom manufacturing services from OSI Systems' optoelectronics and manufacturing division for integration into their own products.

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Ajay Mehra, President and Chief Executive Officer

Ajay Mehra was appointed President and Chief Executive Officer of OSI Systems, Inc. effective January 1, 2025. He joined OSI Systems in 1989 in a financial management role and previously served as Chief Financial Officer from November 1992 to November 2002, during which time he oversaw the company's initial public offering and the launch of its Security division. Most recently, he served as Executive Vice President and President of the Security division, leading it to over $1 billion in annual revenues.

Alan Edrick, Executive Vice President and Chief Financial Officer

Alan Edrick joined OSI Systems, Inc. as Executive Vice President and Chief Financial Officer in July/September 2006. He possesses over three decades of experience in financial management and public accounting, including expertise in mergers and acquisitions, capital markets, financial planning and analysis, and regulatory compliance. Before joining OSI Systems, Mr. Edrick was Executive Vice President and Chief Financial Officer of BioSource International, Inc., a biotechnology company, from 2004 to 2006, until its acquisition by Invitrogen Corporation. From 1998 to 2004, he served as Senior Vice President and Chief Financial Officer of North American Scientific, Inc., a medical device and specialty pharmaceutical company. Prior to that, he worked at Price Waterhouse LLP from 1989 to 1998, holding various positions including Senior Manager in Capital Markets.

Victor Sze, Executive Vice President, General Counsel and Corporate Secretary

Victor Sze has been with OSI Systems, Inc. since March 2002, when he joined as Vice President of Corporate Affairs and General Counsel. He was appointed Secretary in November 2002 and became Executive Vice President in September 2004. Before his tenure at OSI Systems, Mr. Sze served as in-house counsel for Interplay Entertainment Corp. from 1999 to 2001 and practiced law at Wolf, Rifkin & Shapiro.

Paul Morben, President, Optoelectronics and Manufacturing division

Paul Morben first joined OSI Systems, Inc. in 1983 and brings over 40 years of experience in the optoelectronics and manufacturing services industries. His extensive experience includes 15 years in Asia, where he was responsible for establishing and leading the company's manufacturing operations across Singapore, Indonesia, and Malaysia.

Wilson Constantine, President, Spacelabs Healthcare

Wilson Constantine is the President of Spacelabs Healthcare, a division of OSI Systems. Prior to this role, he served as CEO of Monarch Medical Technologies, a private equity-backed spinout of Hospira Worldwide. He also held executive positions at Stryker Orthopaedics, Misonix Inc., and Henry Schein Inc.

1. Dependence on Government Contracts and Associated Risks: OSI Systems faces significant risk due to its reliance on key customers, particularly government agencies. The loss of such customers or disruptions in government budgets, including delays in U.S. federal budgeting, could adversely affect the company's reputation and financial results. This also includes ongoing exposure to delayed sovereign payments and working capital fluctuations, which can impact cash flow stability.
2. Product and Professional Liability: A critical risk for OSI Systems stems from the potential failure of its security systems to detect threats. Such failures could lead to substantial product and professional liability claims, potentially exceeding insurance coverage, and causing significant damage to the company's reputation and future revenue.
3. Intense Competition and Rapid Technological & Regulatory Changes: OSI Systems operates in a highly competitive and fast-evolving environment across its security and healthcare divisions. This necessitates continuous product innovation to address evolving threats like terrorism and drug trafficking, as well as to keep pace with rapid technological advancements that could render existing products obsolete. The company must also constantly adapt to changing international security standards and healthcare industry regulations and cost containment pressures.

The increasing adoption of remote patient monitoring (RPM) and advanced wearable medical devices. This trend represents a clear emerging threat to OSI Systems' traditional hospital-centric patient monitoring business (Spacelabs Healthcare). Similar to how streaming services disrupted physical media rentals, RPM and wearables are shifting healthcare delivery towards continuous, proactive monitoring outside of acute care settings, potentially reducing the long-term demand for conventional bedside monitoring equipment in certain patient populations or care scenarios.

OSI Systems (OSIS) operates in three main segments: Security, Healthcare, and Optoelectronics and Manufacturing. The addressable markets for their main products and services are as follows:

Security Division

The Security division provides security inspection systems, including baggage and parcel inspection, cargo and vehicle inspection, people screening, radiation monitoring, and trace detection systems.

• The global security inspection market was valued at approximately USD 12.0 billion in 2024 and is projected to reach USD 22.7 billion by 2032, with a compound annual growth rate (CAGR) of 8.29% from 2025 to 2032.
• Another estimate values the global security inspection market at USD 12.89 billion in 2025, with a projection to grow to USD 47.83 billion by 2035 at a CAGR of 7.2%.
• The U.S. security inspection market alone is projected to grow from USD 3.9 billion in 2024 to USD 7.2 billion by 2032, at a CAGR of 8.08%.

Healthcare Division

The Healthcare division offers patient monitoring, cardiology and remote monitoring, and connected care systems.

• The global patient monitoring devices market was valued at USD 50.36 billion in 2024 and is expected to reach USD 118.21 billion by 2033, exhibiting a CAGR of 10.21% from 2025 to 2033.
• Other reports indicate the global patient monitoring devices market was valued at USD 48.5 billion in 2024 and is projected to reach USD 71.1 billion by 2029, growing at an 8.0% CAGR.
• North America held the largest share of this market, accounting for 35.02% in 2024.

Optoelectronics and Manufacturing Division

This division designs, manufactures, and markets optoelectronic devices and provides electronics manufacturing services.

• The global optoelectronics market size was valued at USD 44.84 billion in 2022 and is projected to grow to USD 73.83 billion by 2030, at a CAGR of 6.7% during the forecast period (2023-2030).
• Another source estimates the global optoelectronics market was valued at USD 156.65 billion in 2024 and is projected to reach USD 213.32 billion by 2032, with a CAGR of 4.3% from 2025 to 2032.
• Asia Pacific dominated the global optoelectronics market with a share of 55.66% in 2022.

OSI Systems (NASDAQ: OSIS) is expected to drive future revenue growth over the next two to three years through several key initiatives and market trends:

1. Robust Backlog and New Security Contracts: The company continues to maintain a substantial backlog, which was approximately $1.8 billion as of Q1 FY25 and nearly $1.9 billion as of Q1 FY26, providing strong revenue visibility. OSI Systems has also secured significant new contracts, including a $75 million order for non-intrusive inspection products, particularly bolstering its Security division. This division has shown strong performance, with Q1 FY25 revenues increasing 36% year-over-year and Q1 FY26 revenues up 13% year-over-year.
2. Growth in Recurring Service Revenue: A significant driver is the expansion of higher-margin, recurring service revenues. Management anticipates service revenues will continue to outpace product sales, benefiting from an increasing installed base of products and multi-year support contracts, which contributes to greater stability and predictability of future earnings. For example, recurring service revenues grew 23% year-over-year in Q1 FY26.
3. Increased Global Demand for Advanced Security and Inspection Solutions: Geopolitical tensions, substantial multi-year funding from recent U.S. government legislation for border, port, infrastructure, and large-scale event security (such as the "Big Beautiful Bill" and Golden Dome program), and expanded adoption of SaaS-based offerings like CertScan are expected to sustain and increase demand for OSI Systems' security and integration solutions globally.
4. Strategic Acquisitions and Product Innovation: OSI Systems has been making strategic bolt-on acquisitions, particularly in its Security division, which are anticipated to be accretive to earnings and enhance the company's existing offerings. Furthermore, the company maintains a continuous focus on innovation and expansion across its divisions, including new orders for advanced optical sensors within its Optoelectronics and Manufacturing segment.
5. Expansion in Optoelectronics and Manufacturing, and Progress in Healthcare: The Optoelectronics and Manufacturing division is capitalizing on reshoring and nearshoring trends, providing alternatives to China-centric supply chains, and reported record Q4 FY24 revenues. While the Healthcare division has faced challenges, it has recently shown progress, with sales growing 10% in Q3 CY2025 due to international market activity and operational improvements, with plans for further R&D and efficiency investments to drive long-term growth.

Share Repurchases

• In September 2022, OSI Systems increased the number of shares available under its share repurchase program to 2,000,000 shares.
• As of September 2022, the company had purchased approximately 1.9 million shares of common stock from a 3 million share buyback program established in 2020.
• Share buybacks have contributed to a 4.7% reduction in the share count over the last five years, positively impacting earnings per share growth.

Outbound Investments

• Over the past decade, OSI Systems incurred USD 432 million on acquisitions, net of divestitures, indicating a strategic use of capital for growth.

Capital Expenditures

• Capital expenditures were $22.1 million in fiscal year 2024 and $23.83 million in fiscal year 2025.
• Expected capital expenditures are projected to be $30.2 million for fiscal year 2026, $32.87 million for fiscal year 2027, and $45 million for fiscal year 2028.
• Over the past decade, the company's cumulative capital expenditures amounted to USD 296 million.